illegal to charge late fees?

My doctor had billed me for an appt and then added a late fee...I paid the bill but not the late fee which i disagreed with...he kept charging $25 fees on top of the remaining late fee...(the principal had been paid)...so $25 became $50 and on and on...so now it's gone to collection and it's about $150!

Isn't it illegal to charge a finance charge (or late fee) on top of a late fee?!

Re: illegal to charge late fees?

Originally posted by sprungli My doctor had billed me for an appt and then added a late fee...I paid the bill but not the late fee which i disagreed with...he kept charging $25 fees on top of the remaining late fee...(the principal had been paid)...so $25 became $50 and on and on...so now it's gone to collection and it's about $150!

Isn't it illegal to charge a finance charge (or late fee) on top of a late fee?!

It depends on whether the doctor gave "fair notice" of the charges. Fair notice would be a ststement on a piece of paper you either were give on signed, or a sign prominently posted in the public area of the doctor's offices.

Re: illegal to charge late fees?

Originally posted by sprungli My doctor had billed me for an appt and then added a late fee...I paid the bill but not the late fee which i disagreed with...he kept charging $25 fees on top of the remaining late fee...(the principal had been paid)...so $25 became $50 and on and on...so now it's gone to collection and it's about $150!

Isn't it illegal to charge a finance charge (or late fee) on top of a late fee?!

Hi Sprungli,

First, they may not charge a late fee unless it's stipulated in your financial responsibility agreement you signed when you first saw the Doc. Since I know you don't have a copy, go get one or have them fax one to you. :)

Second, what you're referring to is called "pyramiding late fees" and you're right, they cannot do that. If your bill is $100 and you pay late, they can add the late fee, as long as it's in the contract. Once you pay the principal, but not the late fee, they may not pile on one late fee after another to increase the balance.

Now wouldn't you know it. Just last night I read case law about this very issue, so I do know I'm correct. Right now I just can't remember where I saw it. I'll look for it. Heintz v. Jenkins, btw, was about an atty. attempting to collect more than what was owed.

But until I can find it and prove what I'm saying I have to qualify my remarks.

Re: illegal to charge late fees?

Originally posted by sprungli My doctor had billed me for an appt and then added a late fee...I paid the bill but not the late fee which i disagreed with...he kept charging $25 fees on top of the remaining late fee...(the principal had been paid)...so $25 became $50 and on and on...so now it's gone to collection and it's about $150!

Isn't it illegal to charge a finance charge (or late fee) on top of a late fee?!

You just need to request validation, sprungli, the FDCPA covers that.

It is also covered under the FCBA, but that doesn't apply to medical bills.

Heintz v Jenkins isn't really applicable, the whole point of that case primarily was the validation requirements and mini-miranda wording as it applied to attorney's communications as a debt collector versus being exempted under the FDCPA. It changed the entire interpretation of the FDCPA too. It's a great case, but not here.

So, send a validation letter to the CA, the additional fees and interest are covered there.

If you want to address the OC, since it's a doctor, look to your state's unfair and deceptive businesses practices act. It won't go that far though, because it is a medical bill, there is never interest on medical bills (save plastic surgery) and would have to have been part of your original agreement with the Doctor to be allowed -- most doctors don't go there.

Getting the original agreement is the key, showing you agreed to it or NOT, required as part of validation -- it is unlikely you'll be receiving one.

Collection activity has to cease until and if it is ever provided, that will take care of that TL and doctor's don't report directly.